Govt plans to ban blacklisted people from leading coops

KATHMANDU, MAR 24:

The government is planning to ban people who have been blacklisted by the banks and financial institutions from leading cooperatives.

An advisory committee led by joint secretary of the Finance Ministry Baikuntha Aryal has suggested the government to ban people who have been blacklisted from assuming the posts of chief executive officers and other high-level designations of cooperatives.

The five-member committee has representatives from the Ministry of Cooperatives and Poverty Alleviation, Department of Cooperatives, National Cooperatives Association, and Nepal Rastra Bank.

“Most cooperatives that are in problem are those being headed by blacklisted people, so we have decided to ban them from holding important positions,” said a member of the team on condition of anonymity.

Similarly, the committee has also urged the government to ban people involved in financial crimes from being members of cooperatives. The provision will help streamline the cooperative sector, he added.

The committee has laid emphasis on maintaining the values and norms of cooperatives in savings and credit cooperatives operating in urban and semi-urban areas.

According to an estimate, deposits in the cooperative sector has increased in recent months to Rs 150 billion, as compared to Rs 110 billion last year. Banks and finance companies had deposits worth Rs 901 billion till last week.

According to the report, cooperatives operating in municipal areas must also have members who are graduates.

“Half the members must be graduates and the executive committee too must have at least 30 per cent graduates,” he said.

The High Level Financial Task Force had formed the committee to suggest reforms in the cooperative sector due to various problems among big cooperatives. About Rs 25 billion that has been deposited in cooperatives is at risk at the moment. About 27,000

cooperatives are in operation in the country and 12,000 are savings and credit cooperatives.

Cooperatives operating in urban areas have been suffering from liquidity problem since the realty sector started to fall four years back.

Savings and credit cooperatives have deposits worth Rs 150 billion.

Source: THT